Ask Jeeves Completes Search Acquisition

The company's $501 million purchase of Interactive Search Holdings doubles its market share as it gains Web properties such as Excite and iWon.

Ask Jeeves Inc. on Friday completed an acquisition that is poised to double its market share in the increasingly competitive Web search market.

The Emeryville, Calif., search company said it has closed its $501 million purchase of Interactive Search Holdings Inc., a privately held company whose Web properties include Excite and iWon.

The acquisition makes Ask Jeeves the seventh-largest Web property based on unique users and gives it a reach to about 25 percent of U.S. Web searchers, the company said.

Ask Jeeves expansion comes in the midst of intensifying competition in the Web search market. Last week, Google Inc. filed for a public offering that could raise $2.7 billion and help it fend off competitors.

Yahoo Inc. earlier this year replaced Google with its own search results, and Microsoft Corp.s MSN group has said it plans to compete by launching its own search technology later this year.

When Ask Jeeves announced the deal in March, it said that Interactive Search Holdings accounted for about 700 million searches in the fourth quarter of 2003, compared with 680 million searches for Ask Jeeves.

Unlike Ask Jeeves, which owns the Teoma search-engine technology, Interactive Search Holdings had focused on offering search and portal tools on top of search-engine results from such Ask Jeeves competitors as Google, Yahoo and LookSmart Ltd.

Ask Jeeves has yet to detail how it plans to integrate the new properties with its own sites and search technology, but it has said that Interactive Search holdings will be a subsidiary and remain based in Irvington, N.Y. Other Web properties Ask Jeeves gained in the acquisition are My Search, My Way, My Web Search and the MaxOnline advertising service.

"We now have substantially more traffic and advertising inventory, which we believe will increase our value to advertisers and partners," Ask Jeeves CEO Steve Berkowitz said in a statement Friday.

/zimages/2/28571.gifClick here to read more about Ask Jeeves recent changes to its paid inclusion search programs.

As part of the acquisition, Ask Jeeves issued 9.3 million shares of common stock and options and paid about $144 million in cash. The company has scheduled a conference call Wednesday with financial analysts to discuss the acquisition.

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